U.S. bank looked other way to Mexican drug war money laundering, agent says

A former compliance officer with the U.S. bank Wachovia, Martin Woods has seen the Mexican drug war and its illicit money unseen by even the most seasoned observers. Woods started asking questions about billions of dollars pouring into Wachovia accounts in the U.S. from Mexican currency exchanges back in 2006. "I guess what surprised me most was my own na´vetÚ . I aggravated my own employers (by bringing forward evidence of laundering) and also the regulators themselves."

Money laundered in the U.S. in turn flows back into Mexico, where cartels use it to pay underlings, bribe politicians, invest in legitimate businesses and purchase raw product.

Highlights

LOS ANGELES, CA (Catholic Online) - Wachovia, currently owned by Wells Fargo, settled out of court for the largest violation of the Bank Secrecy Act in U.S. history in 2010, paying a fine of $160 million for laundering a staggering $378.4 billion from Mexican currency exchange houses between the years 2004 and 2007.

The majority of the cash is believed to be drug money, moved without proper documentation from Casa's de Cambio in Mexico to U.S. banks.

"There was no consequence for anyone dealing with that money. Some other compliance officers broke the rules and they kept their jobs. I obeyed all the rules, blew the whistle and lost my job," Woods says.

This is a side of the Mexican drug war that few people see. Ever since Mexican President Felipe Calderon used his nation's military against the drug cartels, an estimated body count has soared past 50,000 people dead.

Public beheadings have become commonplace and the cartels have brazenly gunned down unarmed civilians in public. Financial analysts, then say there is no exaggeration in accusing bankers of laundering blood money for international assassins.

"The whole point of being a drug dealer is money," Heather Lowe, a Washington-based lawyer with Global Financial Integrity says. "Identifying and stopping that money flow is crucial."

The U.N. Organization on Drugs and Crime estimates that illegal narcotics represent the world's third-biggest export, after oil and the arms trade, worth more than $300 billion annually.

"You have these horrendous crimes being committed, people being shot 10, 20 or 30 at a time," Walter MacKay, a former Canadian police officer who has trained Mexican security forces says. "This dirty money washing through economies just exacerbates everything," he told Al Jazeera.

Illicit drug sales in the United States generate annual revenues between $18 billion and $39 billion, according to the U.S. Justice Department's Federal Bureau of Investigation. The money in turn flows back into Mexico, where cartels use it to pay underlings, bribe politicians, invest in legitimate businesses and purchase raw product.

Most tragically, the "war on drugs" doesn't seem likely to end anytime soon. Many analysts believe the military solution isn't working as violence is increasing. Some policy experts and forensic accountants believe tracking money earned by cartels, along with waging a PR campaign to tackle the demand side of the equation in the U.S., is the best in a series of bad options.

"In order to weaken organized crime, it is far safer and more effective in the long run to erode its financial base," Laura Carlsen, director of the Americas program of the International Relations Centre in Mexico City says.

Currency exchange houses, like the ones used by Wachovia, are probably the most common way for cartels to launder funds. Traffickers normally "contract with money brokers to use their networks of bank accounts and business connections to structure large sums for transport across the border"; former Arizona Attorney General Terry Goddard told a gathering at Woodrow Wilson Center said.

Pope Francis Prayer Intentions for March 2015
Universal: Scientists: That those involved in scientific research may serve the well-being of the whole human person.
Evangelization: Contribution of women: That the unique contribution of women to the life of the Church may be recognized always.

Comments

A 22-year-old woman, only identified as Laura, was reportedly a good girl before the devil turned her bad, according to Argentina locals. In this disturbing footage, Laura is seen writhing in pain, screaming as Bishop Manuel Acuna performs an exorcism on her. LOS ... continue reading

The
Montana Magica Lodge, located in the middle of the southern Andes is
something straight from "The Hobbit." It is a literal "Magic Mountain."
There is a manmade volcano with a stunning waterfall cascading down its
side. LOS ANGELES, CA (Catholic Online) - ... continue reading

A
massive, fabricated canal, headed by the Hong Kong-based consortium HK
Nicaragua Canal Development Investment Company, or HKND is set to
undergo construction. The $50 billion project, called the Nicaragua
Canal, or the Nicaragua Grand Canal and Inter-oceanic ... continue reading

At
18,000 feet, Pico de Orizaba in Mexico is the country's highest
elevated level. Several climbers have lost their lives trying to scale
the mountain. The skeletal remains of two climbers, recently discovered
there, are believed to be two of three members of ... continue reading

Chile's most active volcano finally erupted, after starting to show signs of seismic disturbance a few days ago. The volcanic activity raised alarm to over 3,300 residents who were evacuated from the small towns of Villarrica, Pucon and Conaripe before the eruption ... continue reading

Archaeologists have finally found the main subject of legends and folklore about "monkey children," a "monkey god" and a "massive source of gold." The city that was left mysteriously by an unidentified civilization hundreds of years ago has been rediscovered in the far ... continue reading

A major blow has been dealt to the infamous Knights Templar drug cartel,
after Mexican federal police arrested Servando Gomez, the leader of the
group, on February 27. LOS ANGELES, CA (Catholic Online) - The Knights Templar have been operating out of the ... continue reading

Many
residents in eastern Canada have resigned themselves to sitting out
this winter. Massive snowfalls have left many prisoners in their homes,
snow past windowsills, reaching up to roofs in many parts of Nova Scotia
and New Brunswick. LOS ANGELES, CA ... continue reading

A
new strain of HIV in Cuba that progresses to AIDS twice as fast has
many medical officials worried. Those who contract this form of HIV are
left with a much shorter window in which they can seek treatment. LOS ANGELES, CA (Catholic Online) - A deadly mix of ... continue reading

A
spectacular video is making the rounds, and it's just another case of a
not-so-little engine that could. A Canadian freight train doesn't shy
away from a massive snow bank - and plows straight through it, spreading
snow all over the place in a mini-avalanche. ... continue reading